The new Directive on European Works Councils improves workers’ rights to information and transnational consultation within Community-scale undertakings. The new provisions should allow the number of Councils to be increased and their smooth operation to be ensured.

ACT

Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Recast) (Text with EEA relevance).

SUMMARY

This Directive aims at guaranteeing employees’ transnational information * and consultation * rights. It provides for the establishment of a European Works Council or a procedure for informing and consulting employees in Community-scale undertakings * and groups of undertakings.

Matters dealt with by the European Works Council or the information and consultation procedure are of a transnational nature.

The powers of the European Works Council and the scope of the information and consultation procedure concern: all establishments of the undertaking or all establishments in a Community-scale group situated in the Member States.

Member States may provide that this Directive shall not apply to merchant navy crews.

The dominant influence of an undertaking

The Directive defines a “controlling undertaking” – i.e. which exercises a dominant influence over a “controlled undertaking”. This influence is established if an undertaking:

holds a majority of another undertaking’s subscribed capital;

controls a majority of the votes attached to that undertaking’s issued share capital; or

can appoint more than half of the members of that undertaking’s administrative, management or supervisory body (this last criterion is determining).

Creation of a European Works Council

The central management of the undertaking or the group is responsible for establishing a Council or an information and consultation procedure. If a representative is not appointed, where the management is not located in a Member State of the European Economic Area (EEA), it is the responsibility of the establishment or undertaking which employs the largest number of workers in one of the Member States.

The central management shall initiate negotiations to establish the European Works Council or the information and consultation procedure. It shall act:

on its own initiative; or

at the written request of at least 100 employees (or their representatives) in at least two undertakings (or establishments) in at least two different Member States.

A special negotiating body shall be formed by employees’ representatives. They may be elected or appointed, according to the number of employees in each Member State where the undertaking is present. The special group shall negotiate an agreement with the management in order to define the operation of the European Works Council and the arrangements for implementing a procedure for the information and consultation of employees.

The members of this group shall receive the same protection as employees’ representatives, as laid down by national legislation and/or practice in the country where they are employed.

Context

Directive 94/45/EC is repealed with effect from 6 June 2011, the date on which this Directive enters fully into force.

Key terms

Community-scale undertaking: which employs at least 1000 employees within the Member States, and at least 150 employees in two different States.

Information: transmission of data by the employer to the employees’ representatives in order to enable them to acquaint themselves with the subject matter and to examine it. Employees’ representatives may in particular undertake an in-depth assessment of the possible impact and, where appropriate, prepare for consultations.

Consultation: establishment of dialogue and exchange of views enabling representatives to express an opinion about the proposed measures. This opinion may be taken into account within the undertaking or group of undertakings.